Daniel Idonor
30 August 2007
Abuja — FEDERAL Government yesterday announced the scrapping of the Nigeria National Petroleum Corporation (NNPC) and the Ministry of Petroleum.
They were promptly replaced with five new agencies that would henceforth control and regulate the nation's oil and gas sector.
But all the agencies will be reporting to President Umaru Musa Yar'Adua through Minister of State for Petroleum, Odien Ajumogabia.
The unbundling of the NNPC and the birth of the agencies were among issues ratified yesterday at the meeting of the Federal Executive Council (FEC) presided over by President Yar'Adua.
Briefing State House Correspondents in Abuja, Ajumogabia said the National Petroleum Directorate (NPD) will replace the present Ministry of Petroleum while the once powerful NNPC has now been replaced by National Oil Company (NOC).
He declined comment on the fate of the incumbent acting Group Managing Director of the NNPC, Alhaji Abubakar Yar'Adua.
The current Department of Petroleum Resources (DPR) formerly a department under the Ministry of Petroleum, he said has been replaced with an autonomous entity to be called Petroleum Inspectorate Commission (PIC).
The present Pipeline Product Marketing Company (PPMC) has also been replaced with Products Distribution Authority (PDA) and the newly created National Oil and Gas Assets Holding Company (NOGAHC).
He said the changes were based on the recommendation of the harmonised report of the Oil and Gas Reform Committee (OGRC) and the National Council on Privatisation (NCP) Committee reports which were set up about five years ago to restructure the country's oil and gas sector of the economy.
Said he: "One of the highlights of the new policy is the unbundling of the NNPC. This is going to create five new organizations out of the existing structure. A new Petroleum Directorate is to be set up. A national oil company, that is NNPC itself as it is now known, is to be reorganized to empower it to conduct itself like any other oil and gas company. It will be isolated from some of its other functions.
For example, DPR currently is a department in the Ministry of Energy and this will be replaced by a Commission known as Petroleum Inspectorate Commission that would be independent and empowered to do what it is supposed to do which is to monitor the industry effectively.
"There is Petroleum Product Distribution Authority which is another new organization. There is also the National Oil and Gas Assets Holding and Management Services Company which will effectively replace NAPIMS to manage the assets that are currently being managed under the umbrella of the NNPC. The council approved the constitution of the Energy Council which will work within the six months time frame to implement the decision of the council."
He said harmonised report was presented to the Federal Executive Council (FEC) presided over by President Yar'Adua with Vice President Goodluck Jonathan in attendance.
"Those two reports were presented to the council, that is OGIC with a working document comprising the document that came out of the National Council on Privatisation. The unbundling thing that was added to that OGIC report was creation of the National Energy Council", he added
The Council meeting which approved the recommendation of the harmonised report, he said, also approved the earlier establishment of the National Council on Energy (NCE), to be headed by the President and his Vice as Chairman and Vice Chairman respectively. According to him, FEC has mandated the Energy Council which would soon be inaugurated, to begin the implementation of the new policy within the next six months.
Other members of the Energy Council are the Ministers of Power, National Planning, Justice and Finance; National Security Adviser, Honorary Presidential Adviser on Petroleum, Rilwanu Lukman and four other members to be named by the President.
The FEC meeting also approved the provision of electricity supply and upgrading of the lighting system at the Port Harcourt International Airport at the contract sum of N725.5 million and N92 million respectively.
The Murtala Muhammed International Airport, Ikeja also received a boost as a 33KVA cables worth N166.790 million were also approved by government. This is the first time the Yar'Adua administration will be awarding any contract of any form.
Other decisions of the FEC meeting which also includes the stoppage of disbursing capital expenditure of the previous year in the preceding year by agencies was conveyed to State House Correspondents by the Ministers of the Information and Communication, Mr John Odey and the Minister of State for Finance, Mr Remi Babalola as that of Petroleum, Ajumogabia. The new finance policy now forbids any ministry or agency from spending monies earlier earmarked for projects in the previous year in the new year especially capital budget.
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